Deal reached — Sequestration still set to kick in January — Everyone gets paid

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DISASTER: AVERTED. CAN: KICKED — Congress agreed on a deal last night that reopens the government and raises the debt ceiling, saving the U.S. from defaulting on its debt. Phew.

After President Barack Obama signed the bill, the Office of Management and Budget issued a formal memorandum early this morning ordering federal agencies to reopen today, reports POLITICO’s Josh Gerstein. http://politi.co/H2AyVI

"All employees who were on furlough due to the absence of appropriations may now return to work. You should re-open offices in a prompt and orderly manner," said OMB Director Sylvia Mathews Burwell in the memo.

Obama is expected to speak today at 10:35 a.m. about the need for Democrats and Republicans to work together on fiscal issues. http://reut.rs/17LKsQR

Meanwhile, the deal is seen as a big loss for Republicans, who were unable to extract any concessions from the White House after their 16-day standoff, report POLITICO’s Jake Sherman and John Bresnahan. http://politi.co/1bY75Ka

THE DEETS: The bill, fashioned in the Senate by Majority Leader Harry Reid and Minority Leader Mitch McConnell, funds the government through Jan. 15 and raises the debt limit through Feb. 7.

WHAT DOES IT ALL MEAN FOR DEFENSE? That depends on what happens between now and January, but the outlook is not so great. The deal leaves sequestration in place and ready to kick in again on Jan. 15, the same day that government funding is now set to run out.

The defense industry’s next hope for getting some relief rests with a budget conference committee that will be led by Senate Budget Committee Chairwoman Patty Murray and House Budget Committee Chairman Paul Ryan. They have until Dec. 13 to put forward a bipartisan plan that addresses the nation’s long-term fiscal challenges. Think of it as a smaller, more serious supercommittee.

— IT MAY GO AS WELL AS THE SUPERCOMMITTEE. Gordon Adams, a fellow at the Stimson Center and a former national security budget official in the Clinton administration, said the prospects for a deal are grim.

“From now on, everything the Congress touches will go through a November 2014 lens,” he said, meaning each party will only make moves that will help it get more seats in the House or Senate in a year.

“Election-year politics will prevail, and that will make a Dec. 13 agreement harder to get. Everything is still on the table — defense, domestic spending, entitlements and the dreaded revenue. In my mind that makes a firm agreement in December unlikely” Adams said.

— GROUNDHOG DAY IN JANUARY: While this deal pulls the U.S. back from the brink of disaster, it’s nothing to be too excited about, said Todd Harrison, a top defense budget analyst at the Center for Strategic and Budgetary Assessments.

“All this really does is temporarily reopen the government until the next crisis on Jan. 15 when sequestration kicks in for 2014,” Harrison told Morning D. “I don’t think anyone should view this outcome as a success or as progress. Congress is merely doing what they could have done more than two weeks ago.”

In the meantime, the Pentagon would be wise to set spending for the next three months to the 2014 sequestration levels, Adams said.

“Better to be safe than very, very sorry.”

NO FLEXIBILITY FOR YOU: McConnell was pushing hard to give federal agencies more flexibility with implementing sequestration, but Reid was not a fan because he feared that would ensure the cuts remain in place.

“If they had included a provision that provided greater flexibility under sequestration, it would have reduced the pain and ultimately made sequestration even more likely to occur in fiscal year 2014,” Harrison said.

MEANWHILE, defense companies are working to reclaim their clout in Congress after failing to get lawmakers to address sequestration, writes POLITICO’s Austin Wright. http://politi.co/1bZ33kX

HOW LONG UNTIL LIFE GETS BACK TO NORMAL AT DOD? Not too long, a defense official told Morning Defense. The first thing to do is recall the approximately 7,000 DoD civilians still on furlough.

“I think the vast majority of our furloughed workforce will have been following the media reports and has already seen that there is a strong possibility that this could be resolved tonight,” and will be more than ready to return to work Thursday, the DoD official said yesterday.

It will take a little longer for business to return to normal, though.

OMB will need to issue spending guidance,which will then need to filter down to all of the various military commands and DoD components. This could take a couple of days, the defense official said, adding that the longer-term impacts of the shutdown are still being assessed.

MARINE CORPS MARATHON UNSCATHED — OORAH! With the government reopening, the annual Marine Corps Marathon scheduled for Oct. 27 can go on as planned. And now that the Government Accountability Office is reopening, contract protests can resume. Reporters may get quicker responses thanks to civilian employees returning to DoD public affairs offices. The DoD inspector general’s office can pick up any investigations that were on hold … and the Early Bird will return.

EVERYONE GETS PAID, via Government Executive’s Kellie Lunney: If you worked during the shutdown, you’re getting paid. And if you’re a federal civilian who was furloughed, don’t worry. You’re going to get paid too. http://bit.ly/173nz1G

IT’S THURSDAYAND THE GOVERNMENT IS OPEN FOR BUSINESS. Thank you for starting your day with Morning Defense during this roller coaster of a week. We can now give baseball our undivided attention. Send your latest defense news, tips, feedback to kbrannen@politico.com. Don't forget to follow on Twitter at @k8brannen, @morningdefense and @PoliticoPro for the latest.

GENEVA DAY 2 — EVERYONE LEAVES FEELING PRETTY GOOD, via AP’s George Jahn and John Heilprin: “Nuclear talks between Iran and six world powers ended on an upbeat note Wednesday, with top Western and Iranian negotiators announcing a follow-up round early next month while speaking of significant progress in efforts to reduce fears that Tehran may be seeking atomic arms.” http://apne.ws/19PAqD5

— NEED TO CATCH UP ON IRAN NEWS? With all the hubbub on Capitol Hill did you tune out what’s going on in Geneva? Then read this helpful Q&A from The New York Times’ Rick Gladstone: http://nyti.ms/GZgiEi

SNOWDEN DOCS REVEAL NSA’S ROLE IN TARGETED KILLING, via WaPo’s Greg Miller, Julie Tate and Barton Gellman: Documents provided to The Washington Post by former NSA contractor Edward Snowden reveal how much the NSA and the CIA cooperate on the White House’s counterrorism drone program. http://wapo.st/15JAu5U

HEAD OF FLEET CYBER COMMAND COULD BE NEXT AT NSA, via Reuters’ Warren Strobel and Mark Hosenball: Navy Vice Adm. Michael Rogers, currently commander of the U.S. Navy's 10th Fleet and U.S. Fleet Cyber Command, is a leading contender to replace NSA Chief Army Gen. Keith Alexander when he steps down in March. NSA Deputy Director Chris Inglis plans to leave by the end of the year. And the moves “could give President Barack Obama a chance to reshape the eavesdropping agency.” http://reut.rs/1fDybXB

OOF — NOT FEELING THE ARMY CYBER VIDEOS, via Buzzfeed’s Justine Sharrock: The Army has put out some seriously silly videos about cybersecurity. The video series, aimed at raising awareness among soldiers, “features hokey names, racial stereotypes, clip art era graphics, and dismal view rates — in some cases less than 100 after months online.” http://bit.ly/15J0IoZ

NAVY SEXUAL ASSAULT VICTIM AND DEFENDANT WANT SUPERINTENDENT OFF THE CASE, via NBC News’ Ali Weinberg and Elizabeth Chuck: “Lawyers for a Naval Academy midshipman facing court-martial on sexual assault accusations have joined a lawsuit — filed by the accuser — to have the Naval Academy superintendent overseeing the case recuse himself.” http://nbcnews.to/H42gjU

WHAT’S ON YOUR SHUTDOWN PLAYLIST TODAY? It’s the last day of the ol’ shutdown playlist. Let’s hope we don’t have to bring this feature back Jan. 16. Today’s song as Morning D looks ahead is “A long December,” by the Counting Crows. http://bit.ly/7E7KvA

SPEED READ:

— A Syrian official says a Geneva peace conference is scheduled for Nov. 23 to 24. Reuters: http://reut.rs/16czTfr

— eBay’s founder is starting a general news site with Glenn Greenwald that aims to pry open official secrets. The Washington Post: http://wapo.st/19LjifQ

— Defense Secretary Chuck Hagel apologizes to Medal of Honor recipient retired Army Capt. William Swenson for the delay in receiving his award. AP: http://bit.ly/1esi8ZC

— U.S. and Afghan officials are praising efforts to contain an increasing number of attacks from the Taliban. The New York Times: http://nyti.ms/15Ig5y9

— The Obama administration intends to sell Saudi Arabia and the United Arab Emirates $10.8 billion worth of new weapons. Bloomberg: http://bloom.bg/168hWyB

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